What is TOWS Matrix?
September 9, 2018 By Hitesh Bhasin Tagged With: Strategic Marketing Articles
TOWS Matrix can be defined as the tool to analyze, generate, compare, and
select the business strategies to attain the overall goals and objectives of the
company such as higher sales, increased profits, and enhanced brand value
amongst other crucial ones.
Anatomy of TOWS Matrix :
TOWS Matrix follows the roots of SWOT Analysis but is quite indifferent from
the same as SWOT Analysis mainly focuses on the aspects of opportunities
and threats whereas TOWS Matrix is the tool for strategy generation and
selection.
SWOT Analysis is the tool for audit and analysis of the business and is used
at the beginning of the planning process and TOWS Matrix is opted at the
later part of the planning process to decide the way forward for the business.
It is the work of the trade-off between the internal and external factors of the
company and the outside environment that affects the operations and overall
objectives of the business.
The strengths and weaknesses are a part of the internal environment of the
business that comprises of employees and staff, HR policies, work culture,
nature, features, and attributes of the products and services offered to
the target market, manufacturing processes and techniques, goals and
objectives, core values, and fundamentals of the company. Most of the times,
the internal factors are controllable in nature.
The opportunities and threats are a part of the external environment that
comprises of government policies, direct and indirect competition in
the market, evolving and changing tastes and preferences of the customers,
dynamic nature of the market, and fluctuation rates of the raw materials
required for the production along with other such extrinsic factors that are
many a times not in control of the business and management of the company.
Rules of TOWS Matrix :
1. The analytical methodology and approach of TOWS Matrix are quite
subjective in nature like many other tools, frameworks, models, and
concepts to come up with the business strategies that are edgy and
outlandish in nature to accomplish the aims and objectives of the
company. Depending on the merit of the situation and all the internal and
external factors affecting the business, it is as robust as the data that is
being included in the model.
2. It is quite mandatory to be very specific in the overall approach and
process eliminating all the grey areas so that the strategies arrived is
feasible, realistic, and functional in nature.
3. It is always advisable to second the final analysis of the TOWS Matrix with
the other strategic models such as Porter’s Generic Strategies and others
that provide competent results.
4. It is necessary that the strategy should include the internal growth
and development of the company by the way of mergers, acquisitions,
new product development, capturing new markets and target audience,
and joint ventures.
The 4 TOWS Matrix Strategies :
1) Strengths and Opportunities in TOWS Matrix / SO
The first and foremost strategy of the TOWS Matrix involves the using of internal
strengths of the company to make optimum use of the external opportunities
available to the company. Example: If the company has developed a niche and
distinct brand image in the market and minds of the consumers and there is
an opportunity to tap the new market locations or coming up with the new line
of products and services for the same target market, it is one of the best options
for the growth of the firm.
2) Weakness and Opportunities in TOWS Matrix / WO
The second strategy in the line of TOWS Matrix indicates that the management
of the company will find various options and alternatives to overcome the
weaknesses and take advantage of the opportunities that are coming in the
way. It is the best way to diminish the weakness and exploit the opportunities.
Example: If the company is not an expert in any of the business facet that is
required for the growth and success and is presented with the opportunity for
an alliance with the other company that has the required expertise, it works as
a win-win situation for both the parties involved.
3) Strengths and Threats in TOWS Matrix / ST
This strategy of the TOWS Matrix implies that the management of the company
would exploit all the internal strengths to overcome any of the potential threats
that in the way of the business to accomplish the desired goals and objectives.
Example: If the company is facing the astute competition for the existing players
in the market or from the new entrants that are offering the new and innovative
range of the products that are similar to the ones offered by the company, the
company needs to harp on the internal strengths such as quality of the
offerings, authentic manufacturing techniques, customer service, and rich
legacy of the brand amongst others.
4) Weaknesses and Threats in TOWS Matrix / WT
This one is the least appealing strategy of the TOWS Matrix as which company
would harp on its weaknesses to overcome the external threats on the
business. It is always advisable to minimize the weaknesses to avoid the
possible threats.
Limitations of TOWS Matrix :
1. It doesn’t follow the real steps that are mandatory to follow and achieve
the competitive advantage in the market.
2. Many a time, the analytical approach of TOWS Matrix does not consider
the changing competitive environment that is one of the biggest threats to
the business in attaining its objectives of higher sales, elevated profits, and
enhanced brand value.
3. It doesn’t show and highlight the interrelationship amongst the internal and
external factors that affect the business operations and strategies.
Example of TOWS Matrix :
1) Nokia
SO Strategies
Increase the market share and the overall presence in the country of Germany
by offering the innovative and reliable range of products. Elevate the presence
in Asia-Pacific regions by having a customer-driven approach.
Penetrate new markets with business alliances and new product lines.
ST Strategies
Target advertising
Reduce the cost of the products due to the factor of the high level of competition
in the market
Offer customer-oriented products
WO Strategies
Work on the customer service experience and offer competitive prices
Improve the brand position in Japan with paid partnerships
Focus on the US market with a new line of products availing the joint
venture opportunities
Increase profit margins by penetrating in different markets offering customerdriven products
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